Public Act 102-0330
 
SB1690 EnrolledLRB102 17107 HLH 22536 b


  
    AN ACT concerning State government.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Department of Commerce and Economic 
Opportunity Law of the
Civil Administrative Code of Illinois 
is amended  by adding Section 605-1055 as follows:
 
    (20 ILCS 605/605-1055 new)
    Sec. 605-1055. The Illinois Small Business Fund.  The 
Illinois Small Business Fund is created as a nonappropriated 
separate and apart trust fund in the State Treasury. The 
Department shall use moneys in the Fund to manage proceeds 
that result from investments that the Department has 
undertaken through economic development programs, including, 
but not limited to, the Department's Venture Capital 
Investment Program. The Department may use moneys collected to 
reinvest in small business and economic development 
initiatives through grants or loans. The Fund may receive any 
grants or other moneys designated for small business growth 
from the State, or any unit of federal or local government, or 
any other person, firm, partnership, or corporation. Any 
interest earnings that are attributable to moneys in the Fund 
must be deposited into the Fund.
 

    (20 ILCS 605/605-320 rep.)

    Section 10. The Department of Commerce and Economic 
Opportunity Law of the
Civil Administrative Code of Illinois 
is amended  by repealing Section 605-320.
 
    Section 12. The State Finance Act is amended by adding 
Section 5.936 as follows:
 
    (30 ILCS 105/5.936 new)
    Sec. 5.936. Illinois Small Business Fund.
 
    (30 ILCS 750/Art. 11 rep.)
    Section 15. The Build Illinois Act is amended  by repealing 
Article  11.
 
    Section 20. The Economic Development for a Growing Economy 
Tax Credit Act is amended  by changing Sections 5-5, 5-10, 
5-25, 5-70, and 5-90 as follows:
 



    (35 ILCS 10/5-5)



    Sec. 5-5. Definitions. As used in this Act:

    "Agreement" means the Agreement between a Taxpayer and the 
Department under
the provisions of Section 5-50 of this Act.

    "Applicant" means a Taxpayer that is operating a business 
located or that
the Taxpayer plans to locate within the State 
of Illinois and that is engaged
in interstate or intrastate 
commerce for the purpose of manufacturing,
processing, 
assembling, warehousing, or distributing products, conducting

research and development, providing tourism services, or 
providing services
in interstate commerce, office industries, 
or agricultural processing, but
excluding retail, retail food, 
health, or professional services.
"Applicant" does not include 
a Taxpayer who closes or
substantially reduces an operation at 
one location in the State and relocates
substantially the same 
operation to another location in the State.  This does
not 
prohibit a Taxpayer from expanding its operations at another 
location in
the State, provided that existing operations of a 
similar nature located within
the State are not closed or 
substantially reduced.  This also does not prohibit
a Taxpayer 
from moving its operations from one location in the State to 
another
location in the State for the purpose of expanding the 
operation provided that
the Department determines that 
expansion cannot reasonably be accommodated
within the 
municipality in which the business is located, or in the case 
of a
business located in an incorporated area of the county, 
within the county in
which the business is located, after 
conferring with the chief elected
official of the municipality 
or county and taking into consideration any
evidence offered 
by the municipality or county regarding the ability to

accommodate expansion within the municipality or county.

    "Committee" means the Illinois Business Investment 
Committee created under
Section 5-25 of this Act within the 
Illinois Economic Development Board.

    "Credit" means the amount agreed to between the Department 
and Applicant
under this Act, but not to exceed the lesser of: 
(1) the sum of (i) 50% of the Incremental Income Tax 
attributable to
New Employees at the Applicant's project and 
(ii) 10% of the training costs of New Employees; or (2) 100% of 
the Incremental Income Tax attributable to
New Employees at 
the Applicant's project.  However, if the project is located in 
an underserved area, then the amount of the Credit may not 
exceed the lesser of: (1) the sum of (i) 75% of the Incremental 
Income Tax attributable to
New Employees at the Applicant's 
project and (ii) 10% of the training costs of New Employees; or 
(2) 100% of the Incremental Income Tax attributable to
New 
Employees at the Applicant's project.  If an Applicant agrees 
to hire the required number of New Employees, then the maximum 
amount of the Credit for that Applicant may be increased by an 
amount not to exceed 25% of the Incremental Income Tax 
attributable to retained employees at the Applicant's project; 
provided that, in order to receive the increase for retained 
employees, the Applicant must provide the additional evidence 
required under paragraph (3) of subsection (b) of Section 
5-25.

    "Department" means the Department of Commerce and Economic 
Opportunity.

    "Director" means the Director of Commerce and Economic 
Opportunity.

    "Full-time Employee" means an individual who is employed 
for consideration
for at least 35 hours each week or who 
renders any other standard of service
generally accepted by 
industry custom or practice as full-time employment. An 
individual for whom a W-2 is issued by a Professional Employer 
Organization (PEO) is a full-time employee if employed in the 
service of the Applicant for consideration for at least 35 
hours each week or who renders any other standard of service 
generally accepted by industry custom or practice as full-time 
employment to Applicant.


    "Incremental Income Tax" means the total amount withheld 
during the taxable
year from the compensation of New Employees 
and, if applicable, retained employees under Article 7 of the 
Illinois
Income Tax Act arising from employment at a project 
that is the subject of an
Agreement.

    "New Construction EDGE Agreement" means the Agreement 
between a Taxpayer and the Department under the provisions of 
Section 5-51 of this Act. 
    "New Construction EDGE Credit" means an amount agreed to 
between the Department and the Applicant under this Act as 
part of a New Construction EDGE Agreement that does not exceed 
50% of the Incremental Income Tax attributable to New 
Construction EDGE Employees at the Applicant's project; 
however, if the New Construction EDGE Project is located in an 
underserved area, then the amount of the New Construction EDGE 
Credit may not exceed 75% of the Incremental Income Tax 
attributable to New Construction EDGE Employees at the 
Applicant's New Construction EDGE Project. 
    "New Construction EDGE Employee" means a laborer or worker 
who is employed by an Illinois contractor or subcontractor in 
the actual construction work on the site of a New Construction 
EDGE Project, pursuant to a New Construction EDGE Agreement. 
    "New Construction EDGE Incremental Income Tax" means the 
total amount withheld during the taxable year from the 
compensation of New Construction EDGE Employees. 
    "New Construction EDGE Project" means the building of a 
Taxpayer's structure or building, or making improvements of 
any kind to real property. "New Construction EDGE Project" 
does not include the routine operation, routine repair, or 
routine maintenance of existing structures, buildings, or real 
property. 
    "New Employee" means:

        (a) A Full-time Employee first employed by a Taxpayer 
    in the project
that is the subject of an Agreement and who 
    is hired after the Taxpayer
enters into the tax credit 
    Agreement.

        (b) The term "New Employee" does not include:

            (1) an employee of the Taxpayer who performs a job 
        that was previously
performed by another employee, if 
        that job existed for at least 6
months before hiring 
        the employee;

            (2) an employee of the Taxpayer who was previously 
        employed in
Illinois by a Related Member of the 
        Taxpayer and whose employment was
shifted to the 
        Taxpayer after the Taxpayer entered into the tax 
        credit
Agreement; or

            (3) a child, grandchild, parent, or spouse, other 
        than a spouse who
is legally separated from the 
        individual, of any individual who has a direct
or an 
        indirect ownership interest of at least 5% in the 
        profits, capital, or
value of the Taxpayer.

        (c) Notwithstanding paragraph (1) of subsection (b), 
    an employee may be
considered a New Employee under the 
    Agreement if the employee performs a job
that was 
    previously performed by an employee who was:

            (1) treated under the Agreement as a New Employee; 
        and

            (2) promoted by the Taxpayer to another job.

        (d) Notwithstanding subsection (a), the Department may 
    award Credit to an
Applicant with respect to an employee 
    hired prior to the date of the Agreement
if:

            (1) the Applicant is in receipt of a letter from 
        the Department stating
an
intent to enter into a 
        credit Agreement;

            (2) the letter described in paragraph (1) is 
        issued by the
Department not later than 15 days after 
        the effective date of this Act; and

            (3) the employee was hired after the date the 
        letter described in
paragraph (1) was issued.

    "Noncompliance Date" means, in the case of a Taxpayer that 
is not complying
with the requirements of the Agreement or the 
provisions of this Act, the day
following the last date upon 
which the Taxpayer was in compliance with the
requirements of 
the Agreement and the provisions of this Act, as determined
by 
the Director, pursuant to Section 5-65.

    "Pass Through Entity" means an entity that is exempt from 
the tax under
subsection (b) or (c) of Section 205 of the 
Illinois Income Tax Act.

    "Professional Employer Organization" (PEO) means an 
employee leasing company, as defined in Section 206.1(A)(2) of 
the Illinois Unemployment Insurance Act.

    "Related Member" means a person that, with respect to the 
Taxpayer during
any portion of the taxable year, is any one  of 
the following:

        (1) An individual stockholder, if the stockholder and 
    the members of the
stockholder's family (as defined in 
    Section 318 of the Internal Revenue Code)
own directly, 
    indirectly, beneficially, or constructively, in the 
    aggregate,
at least 50% of the value of the Taxpayer's 
    outstanding stock.

        (2) A partnership, estate, or trust and any partner or 
    beneficiary,
if the partnership, estate, or trust, and its 
    partners or beneficiaries own
directly, indirectly, 
    beneficially, or constructively, in the aggregate, at

    least 50% of the profits, capital, stock, or value of the

    Taxpayer.

        (3) A corporation, and any party related to the 
    corporation in a manner
that would require an attribution 
    of stock from the corporation to the
party or from the 
    party to the corporation under the attribution rules
of 
    Section 318 of the Internal Revenue Code, if the Taxpayer 
    owns
directly, indirectly, beneficially, or constructively 
    at least
50% of the value of the corporation's outstanding 
    stock.

        (4) A corporation and any party related to that 
    corporation in a manner
that would require an attribution 
    of stock from the corporation to the party or
from the 
    party to the corporation under the attribution rules of 
    Section 318 of
the Internal Revenue Code, if the 
    corporation and all such related parties own
in the 
    aggregate at least 50% of the profits, capital, stock, or 
    value of the
Taxpayer.

        (5) A person to or from whom there is attribution of 
    stock ownership
in accordance with Section 1563(e) of the 
    Internal Revenue Code, except,
for purposes of determining 
    whether a person is a Related Member under
this paragraph, 
    20% shall be substituted for 5% wherever  5% appears in

    Section 1563(e) of the Internal Revenue Code.

    "Taxpayer" means an individual, corporation, partnership, 
or other entity
that has any Illinois Income Tax liability.

    "Underserved area" means a geographic area that meets one 
or more of the following conditions: 
        (1) the area has a poverty rate of at least 20% 
    according to the latest federal decennial census;
        (2) 75% or more of the children in the area 
    participate in the federal free lunch program according to 
    reported statistics from the State Board of Education; 
        (3) at least 20% of the households in the area receive 
    assistance under the Supplemental Nutrition Assistance 
    Program (SNAP); or 
        (4) the area has
an average unemployment rate, as 
    determined by the Illinois Department of
Employment 
    Security, that is more than 120% of the national 
    unemployment average, as
determined by the U.S. Department 
    of Labor, for  a period of at least 2 consecutive calendar 
    years preceding the date of the application. 
(Source: P.A. 100-511, eff. 9-18-17; 101-9, eff. 6-5-19.)

 



    (35 ILCS 10/5-10)



    Sec. 5-10. Powers of the Department. The Department, in

addition to those powers
granted under the Civil 
Administrative Code of Illinois, is granted and shall
have all 
the powers necessary
or convenient to carry out and effectuate 
the purposes and provisions of this
Act, including, but not 
limited
to, power and authority to:

    (a) Promulgate procedures, rules, or regulations deemed 
necessary and
appropriate for the
administration of the 
programs; establish forms for applications,
notifications, 
contracts, or any other
agreements; and accept applications at 
any time during the year.

    (b) Provide and assist Taxpayers pursuant to the

provisions of this Act, and
cooperate with Taxpayers that are 
parties to Agreements
to promote, foster, and
support economic 
development, capital investment, and job creation or retention

within the State.

    (c) Enter into agreements and memoranda of understanding 
for participation
of and engage in
cooperation with agencies 
of the federal government, local units of government,

universities, research
foundations or institutions, regional 
economic development corporations, or
other organizations for 
the
purposes of this Act.

    (d) Gather information and conduct inquiries, in the 
manner and by the
methods as it deems desirable,
including 
without limitation, gathering information with respect to

Applicants for the
purpose of making any designations or 
certifications necessary or desirable or
to gather information 
to
assist the Department Committee with any recommendation or 
guidance in the furtherance of
the purposes of this Act.

    (e) Establish, negotiate and effectuate any term, 
agreement or other
document with any person,
necessary or 
appropriate to accomplish the purposes of this Act; and to

consent, subject to the provisions
of any Agreement with 
another party, to the modification or restructuring of
any 
Agreement to which the
Department is a party.

    (f) Fix, determine, charge, and collect any premiums, 
fees, charges, costs,
and expenses from Applicants,
including, 
without limitation,
any
application fees,
commitment fees, 
program fees, financing charges, or publication fees as deemed

appropriate to pay
expenses necessary or incident to the 
administration, staffing, or operation in
connection with the

Department's or Committee's activities under this Act, or for 
preparation,
implementation, and
enforcement of the terms of 
the Agreement, or for consultation, advisory and
legal fees, 
and other costs;
however, all fees and expenses incident 
thereto shall be the responsibility of
the Applicant.

    (g) Provide for sufficient personnel to permit 
administration, staffing,
operation, and related support

required to adequately discharge its duties and 
responsibilities described in
this Act from funds made

available through charges to Applicants
or from funds as
may 
be appropriated by the General Assembly for the administration 
of this Act.

    (h) Require Applicants, upon written request, to
issue any 
necessary
authorization to the appropriate federal, state, or 
local authority for the
release of information concerning a

project being considered under the
provisions of this Act, 
with the
information requested to include, but not be limited 
to, financial reports,
returns, or records relating to the

Taxpayers' or its project.

    (i) Require that a Taxpayer shall at all times
keep proper 
books
of record and account in accordance with generally 
accepted accounting
principles consistently applied,
with the 
books, records, or papers related to the Agreement in the 
custody or
control of the Taxpayer open for
reasonable 
Department inspection and audits, and including, without 
limitation,
the making of copies of the
books, records, or 
papers, and the inspection or appraisal of any of the
Taxpayer 
or  project assets.

    (j) Take whatever actions are necessary or appropriate to 
protect the
State's interest in the
event of bankruptcy, 
default, foreclosure, or noncompliance with the terms and

conditions of financial
assistance or participation required 
under this Act, including the power to
sell, dispose, lease, 
or rent, upon
terms and conditions determined by the Director 
to be appropriate, real or
personal property that the

Department may receive as a result of these actions.

(Source: P.A. 91-476, eff. 8-11-99.)

 



    (35 ILCS 10/5-25)



    Sec. 5-25. Review of Application. 

    (a) (Blank). In addition to those duties granted under the 
Illinois Economic
Development Board Act, the Illinois
Economic 
Development Board shall form a Business Investment Committee 
for the
purpose of making
recommendations for applications.  At 
the request of the Board, the Director of
Commerce and

Economic Opportunity or his or her designee, the Director of 
the
Governor's Office of Management and Budget or
his or her 
designee, the
Director of Revenue or his or her designee, the 
Director of Employment
Security or his or her designee,
and an 
elected official of the affected locality, such as the chair 
of the
county board or the mayor, may
serve as members of the 
Committee to assist with its analysis and
deliberations.

    (b) The Department shall determine which projects will At 
the Department's request, the Committee
shall
convene, make 
inquiries,
and conduct studies in the manner and by the 
methods as it deems desirable,
review information with
respect 
to Applicants, and make recommendations for
projects to 
benefit the State.  In making its recommendation that
an 
Applicant's application for Credit should or should not be 
accepted, which
shall occur
within a reasonable time frame
as 
determined by the nature of the application, the Department 
Committee shall determine
that
all the following conditions

exist:

        (1) The Applicant's project intends, as required by 
    subsection (b) of
Section 5-20 to make
the required 
    investment in the State and intends to hire the required

    number of
New Employees in Illinois as a result of that 
    project.

        (2) The Applicant's project is economically sound and 
    will benefit the
people of the State of
Illinois by 
    increasing opportunities for employment and strengthen the 
    economy
of Illinois.

        (3) That, if not for the Credit, the project would not 
    occur in Illinois,
which may be demonstrated
by evidence 
    that receipt of the Credit is essential to the Applicant's 
    decision to create new jobs in the State, such as the 
    magnitude of the cost differential between Illinois and a 
    competing State; in addition, if the Applicant is seeking 
    an increase in the maximum amount of the Credit for 
    retained employees, the Applicant must provide evidence 
    the Applicant has
multi-state
location options and
could 
    reasonably and efficiently locate outside of the State or 
    demonstrate
that at least one other
state is being 
    considered for the project.

        (4) A cost differential is identified, using best 
    available
data, in the projected costs for the Applicant's 
    project compared to
the costs in the competing state, 
    including the impact of the competing
state's incentive 
    programs. The competing state's incentive
programs shall 
    include state, local, private, and federal funds

    available.

        (5) The political subdivisions affected by the project 
    have
committed local incentives with respect to the 
    project, considering local
ability to assist.

        (6) Awarding the Credit will result in an overall 
    positive fiscal
impact to the State, as certified by the 
    Department Committee using
the best
available data.

        (7) The Credit is not prohibited by Section 5-35 of 
    this Act.

(Source: P.A. 100-511, eff. 9-18-17.)

 



    (35 ILCS 10/5-70)



    Sec. 5-70. Annual report. On or before July 1 each year, 
the Department Committee
shall submit a report to the 
Department on the tax credit program under this
Act to the 
Governor and the General Assembly. The report shall include

information on the number of
Agreements that were entered into 
under this Act during the
preceding calendar year, a 
description of the project that is the
subject of each 
Agreement, an update on the status of projects under

Agreements entered into before the preceding calendar year, 
and the
sum of the Credits awarded under this Act. A copy of 
the report shall
be delivered to the Governor and to each

member of the General Assembly.

    The report must include, for each Agreement: 
        (1) the original estimates of the value of the Credit 
    and the number of new jobs to be created and, if 
    applicable, the number of retained jobs; 
        (2) any relevant modifications to existing Agreements; 
        (3) a statement of the progress made by each Taxpayer 
    in meeting the terms of the original Agreement; 
        (4) a statement of wages paid to New Employees and, if 
    applicable, retained employees in the State;
        (5) any information reported under Section 5-57 of 
    this Act; and 
        (6) a copy of the original Agreement or a link to the 
    Agreement on the Department's website. 
(Source: P.A. 100-511, eff. 9-18-17.)

 



    (35 ILCS 10/5-90)



    Sec. 5-90. Program Terms and Conditions. 

    (a) Any documentary materials or data made available or 
received by any
member of a Committee or
any agent or employee 
of the Department shall be deemed confidential and shall
not 
be deemed public
records to the extent that the materials or 
data consists of trade secrets,
commercial or financial

information regarding the operation of the business conducted 
by the Applicant
for or recipient of any tax
credit under this 
Act, or any information regarding the competitive position of

a business in a particular
field of endeavor.

    (b) Nothing in this Act shall be construed as creating any 
rights in any
Applicant
to enter into an Agreement or in any 
person to challenge the terms of any
Agreement.

(Source: P.A. 91-476, eff. 8-11-99.)

  
 

    (35 ILCS 10/5-40 rep.)

    Section 25. The Economic Development for a Growing Economy 
Tax Credit Act is amended  by repealing Section 5-40.